This article was published in the October 2003 issue of Australian Labour Market Statistics (cat. no. 6105.0).

INTRODUCTION

This article analyses differences in the labour market outcomes for teenagers and adults, using data from the ABS monthly Labour Force Survey (LFS). For purposes of this article, teenagers are defined as those aged 15-19 years, and adults as those aged 25-54 years, representing the main working years.

In July 2003, teenagers had an unemployment rate of 13% and a participation rate of 57%, compared with an unemployment rate of 6% and a participation rate of 80% for adults. However, in assessing these measures, it is necessary to consider the differences in the labour market experiences of teenagers and adults, with many teenagers focussing on education, while others are seeking to enter full-time employment for the first time.

Around 70% of teenagers are involved in full-time education. Of the other 30%, almost a quarter (23%) are in part-time education (based on the May 2002 Survey of Education and Work), with the remainder not participating in education.

Labour force status is derived independently of a person's educational status. While many teenagers studying full-time are not in the labour force (56% in July 2003), others engage in part-time work and so would be classed as employed. Teenagers studying full-time and actively looking for a part-time job would be classed as unemployed in the LFS.

The measures of labour force status represent only part of the different nature of teenagers' participation in the labour force. Another important factor is the frequency of movement between different labour force states, particularly between teaching and holiday periods. The following paragraphs present a broader picture of the labour market experience of teenagers by analysing the transitions among the states of full-time employment, part-time employment, unemployment and not in the labour force.

GROSS FLOWS ANALYSIS

A comparison between the labour force transitions of teenagers and adults can be made by analysing monthly gross flows data from the LFS. Households selected for the LFS are interviewed over eight consecutive months, and people who respond in two consecutive months form a ‘matched sample’. This data can be used to examine the monthly transition between the various labour force states, over a series of consecutive months.

The matched sample usually represents about 80% of all people in the LFS. About two-thirds of the remaining (unmatched) 20% of people in the survey have characteristics similar to those in the matched group, but the characteristics of the other one-third are likely to be somewhat different. This is discussed in more detail in Labour Statistics: Concepts, Sources and Methods (cat. no. 6102.0).

The analysis in this article looks at the proportion of people moving between the labour force states of employed full-time, employed part-time, unemployed and not in the labour force between any two consecutive months during the period July 2001 to June 2003. Comparisons are made between teenagers aged 15 to 19 and adults aged 25 to 54 (representing main working years, after the completion of initial education and training, prior to retirement.

LEVELS OF TRANSITION

The type of labour market activity of teenagers changes more frequently than that of adults. Gross flows data for the period July 2001 to June 2003 shows that, on average, teenagers were three times as likely to change their labour force state as adult men, and two times as likely to change their labour force state as adult women. The proportion of people who changed their labour force state between two consecutive months, on average over this period, was 16% for teenagers, compared to 7% for women aged 25 to 54, and 5% for men aged 25 to 54.

The labour force transitions for teenagers showed a high level of seasonality. In the period studied, the proportion of teenagers changing labour force states between two consecutive months was usually between 13% and 15% from April to October, but considerably higher between November and March.

The rise in labour force transitions for teenagers between November and March coincides with the end of one academic year and the start of another.

LABOUR FORCE PARTICIPATION

The graph below shows the labour force participation rates for teenagers and adults. The data shown is as originally estimated, without any adjustment for seasonal effects.

The labour force participation rate of teenagers (between 55% and 65%) is much lower than that of adult men (around 90%), and slightly lower than that for adult women (around 70%). The peaks in the participation rate for teenagers between November and February show that the increase in transitions in this period is, in part, related to their joining the labour force during the academic holidays and, for some, at the completion of their formal education.

TRANSITIONS FROM NOT IN THE LABOUR FORCE

During the period of study, the proportion of teenagers who were not in the labour force in one month and who joined the labour force in the following month was about the same as for adult men (around 17%), and higher than for adult women (10%). Teenagers joining the labour force and entering employment were most likely to take up part-time work (85% of those who moved to employment worked part-time). The percentage for women who took up part-time work (78%) was closer to that of teenagers than men (39%).

PROPORTION OF PEOPLE CHANGING STATES FROM NOT IN THE LABOUR FORCE

From not in the labour force

Staying outside the labour force

Entering full-time employment

Entering part-time employment

Entering unemployment

%

%

%

%

Teenagers (aged 15-19)

83.3

1.2

7.0

8.5

Adults (aged 25-54)

88.0

2.6

4.8

4.6

Females (aged 25-54)

89.5

1.5

5.2

3.7

Males (aged 25-54)

83.0

5.8

3.7

7.5

EMPLOYMENT

Teenagers were less likely to be employed than adults, and were also more likely to be working part-time than adults. Overall, the proportion of teenagers working part-time was between 60% and 70%, with the rate for women lower, at around 40%, and the rate for men lower still, at under 10%.

TRANSITIONS FROM FULL-TIME EMPLOYMENT

The proportion of teenagers who were employed full-time in one month and who left full-time employment in the next month was higher, at around 14%, than adult women (9%) or adult men (3%). About one in ten of these teenagers moved to part-time employment, which is consistent with working full-time between academic years, but part-time during teaching periods. Around 5% of teenagers employed full-time in one month were not working in the following month, having become unemployed or left the labour force.

PROPORTION OF PEOPLE CHANGING STATES IF IN FULL-TIME EMPLOYMENT

From full-time employment

Staying full-time employed

Moving to part-time employment

Moving to unemployment

Leaving the labour force

%

%

%

%

Teenagers (aged 15-19)

85.8

9.7

2.3

2.3

Adults (aged 25-54)

94.7

3.8

0.5

1.0

Females (aged 25-54)

90.9

7.3

0.4

1.4

Males (aged 25-54)

96.6

2.0

0.6

0.8

TRANSITIONS FROM PART-TIME EMPLOYMENT

The proportion of people remaining in part-time work in two consecutive months was similar for both teenagers and women at 84%. In contrast, two-thirds of men employed part-time remained in part-time jobs, with one quarter finding full-time employment in the following month. Of those teenagers who left part-time work in the following month, around half left the labour force completely, which may be consistent with returning to study after work during the academic breaks.

PROPORTION OF PEOPLE CHANGING STATES IF IN PART-TIME EMPLOYMENT

From part-time employment

Staying part-time employed

Moving to full-time employment

Moving to unemployment

Leaving the labour force

%

%

%

%

Teenagers (aged 15-19)

84.0

5.7

2.5

7.8

Adults (aged 25-54)

80.4

12.9

1.6

5.1

Females (aged 25-54)

83.7

10.2

1.0

5.1

Males (aged 25-54)

65.9

24.7

4.3

5.1

UNEMPLOYMENT

The unemployment rate for teenagers was considerably higher than that for adults throughout the period. It was also strongly seasonal, being high over an extended period (from December to March), but also relatively low in July and, to a lesser extent, November. The unemployment rate for adults was highest around January and February, but the difference was comparatively slight.

The increases in the rates of teenage unemployment towards the end of each year reflect teenagers seeking work, either for the summer holidays, or as they leave education to join the labour force. Their unemployment rate falls considerably during the start of the next year, as teenagers either find work or return to education.

TRANSITIONS FROM UNEMPLOYMENT

Although the teenage unemployment rate was higher than for adults, teenagers were less likely to remain unemployed than adults, particularly adult men. Around 48% of teenagers unemployed in one month were not unemployed in the next month: 19% having moved into employment (most into part-time work), and 29% having left the labour force (most likely indicating a return to study). In comparison, one third of men and 45% of women unemployed in one month had changed their labour force state in the next month.

PROPORTION OF PEOPLE CHANGING STATES IF IN UNEMPLOYMENT

Entering employment

Staying unemployed

Part-time

Full-time

All employment

Moving to not in the labour force

%

%

%

%

%

Teenagers (aged 15-19)

51.9

13.7

5.1

18.8

29.3

Adults (aged 25-54)

61.1

10.2

9.5

19.7

19.2

Females (aged 25-54)

54.8

12.8

6.1

18.9

26.3

Males (aged 25-54)

66.1

8.1

12.4

20.5

13.4

SUMMARY

Teenagers have many more transitions between labour force states than adults, reflecting the seasonal nature of combining work and study: they might join the labour force only during breaks during education, or work part-time while studying, and move to full-time employment during holidays. Although unemployment among teenagers is substantially higher than among adults, teenagers are less likely than adults to remain unemployed for two months running.

FURTHER IN FORMATION

For further information about the Labour Force Survey, contact Peter Bradbury on Canberra 02 6252 6565, email peter.bradbury@abs.gov.au. For further information about the methods used and the results of the gross flows analysis, please contact Lujuan Chen on Canberra 02 6252 5917, email lujuan.chen@abs.gov.au.